Senate Passes the Criminal Antitrust Anti-Retaliation Act, and Takes Another Shot at Increased Protections for Whistleblowers

On November 15, 2017, the United States Senate passed the Criminal Antitrust Anti-Retaliation Act of 2017 (“CAARA”). This Act would amend the Antitrust Criminal Penalty Enhancement and Reform Act of 2004 (“ACPERA”), and would provide a civil remedy to persons fired or otherwise discriminated against for reporting potential criminal violations of the antitrust laws.

ACPERA increased both the penalties associated with criminal antitrust violations and the incentives to self-report such violations. The maximum fine for antitrust violations rose from $10 million to $100 million and from $350,000 to $1 million for corporations and individuals, respectively. Additionally, the maximum term of imprisonment rose from three to ten years. On the other hand, if a firm or individual entered into a leniency agreement with the Department of Justice and cooperated with a plaintiff bringing a civil suit based on conduct covered by the agreement, ACPERA provided that such a party would not face treble damages or joint and several liability.

When reauthorizing ACPERA in 2010, as part of the general package of enhancements for antitrust enforcement, Congress also directed the Government Accountability Office to submit a report that examined, among other topics, “the appropriateness of creating anti-retaliatory protection for employees who report illegal anticompetitive conduct.” Pub. L. No. 111-190 § 5. In its report, the GAO in turn recommended that Congress consider providing persons retaliated against by their employers for reporting criminal antitrust violations a cause of action, both to protect whistleblowers from retaliation and to encourage persons to report criminal antitrust activity.

In response to this recommendation, Senators Chuck Grassley (R-Iowa) and Patrick Leahy (D-Vermont) sponsored CAARA. This legislation would make it unlawful for an employer to “discharge, demote, suspend, threaten, harass, or in any other manner discriminate against a covered individual in the terms and conditions of employment” because that individual engaged in activity protected by CAARA. Protected activity consists of reporting, either to a federal agency, Congress, or an appropriate person within the employer, a potential criminal violation of the antitrust laws, or of another law violated “in conjunction” with the antitrust laws or a Department of Justice antitrust investigation. In addition, filing or assisting investigations by the federal government into such violations is similarly protected. A person retaliated against in this manner would be entitled to “all relief necessary to make the covered individual whole,” including (1) reinstatement; (2) back pay, with interest; and (3) “any special damages . . . including litigation costs, expert witness fees, and reasonable attorney’s fees.” CAARA excludes from its protections persons who “planned and initiated” attempted or completed violations of the antitrust laws or of other laws “in conjunction” with such antitrust law violations, or “planned and initiated an obstruction or attempted obstruction of an investigation by the Department of Justice of a violation of the antitrust laws.”

Before bringing suit, a person would be required to file a complaint with the Secretary of Labor within 180 days of the retaliation. As with an Equal Employment Opportunity Commission complaint, the person may then file suit if, after 180 days, the Secretary of Labor does not issue a final decision. For such suits, CAARA adopts the burden-shifting framework of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century. Under the regulations issued pursuant to that statute, the person alleging a violation must demonstrate that (1) “[t]he employee engaged in a protected activity;” (2) his or her employer “knew or suspected that the employee engaged in the protected activity;” (3) “[t]he employee suffered an adverse action; and” (4) “[t]he circumstances were sufficient to raise the inference that the protected activity was a contributing factor in the adverse action.” 29 C.F.R. § 1980.104(e)(2). If the employee puts forward a prima facie case, then the employer can establish a defense to liability by putting forward clear and convincing evidence that, even absent the employee’s protected conduct, it would have taken the same adverse action with respect to that employee. Harp v. Charter Commc’ns., Inc., 558 F.3d 722, 723 (7th Cir. 2009) (interpreting whistleblower retaliation provisions of Sarbanes-Oxley, which incorporate the same burden of proof in the same manner).

Earlier previous iterations of this bill have passed the Senate before, but without success in the House. While passage remains unclear, given that Senators Grassley and Leahy have sponsored a version of this bill for several consecutive sessions of Congress, it is likely that, if the bill does not pass this time, we will see it again in the future, and we will continue to monitor the bill’s progress.